Buy Kalyan Jewellers India, target price Rs 121: Centrum Broking

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Buy Kalyan Jewellers India, target price Rs 121:  Centrum Broking


Centrum Broking has buy call on with a target price of Rs 121. The current market price of Kalyan Jewellers India is Rs 81. Time period given by analyst is one year when Kalyan Jewellers India Ltd. price can reach defined target.

Kalyan Jewellers India Ltd., incorporated in the year 2009, is a Small Cap company (having a market cap of Rs 8343.43 Crore) operating in Gems and Jewellery sector.

Kalyan Jewellers India Ltd. key Products/Revenue Segments include Diamonds/Gems/Jewellery and Other Operating Revenue for the year ending 31-Mar-2022.

Financials

For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 3340.52 Crore, up 16.45 % from last quarter Total Income of Rs 2868.52 Crore and up 103.50 % from last year same quarter Total Income of Rs 1641.50 Crore. Company reported net profit after tax of Rs 107.77 Crore in latest quarter.

Investment Rationale
The brokerage reckons Kalyan’s strategy revolved around adding new stores in non-south markets and calibrated expansion in Middle East region. Further management appears to be confidant on its strategy of non-South markets to improve studded ratio, serving millennials meeting their aspirational demand by introducing new designs. It increases earnings for FY23E/24E by 27.8%/26.7% and retains BUY, with a DCF-based revised TP of Rs121 (implying 27.5x FY24E EPS). Risks: irrational competition; prolonged recovery in the economy, leading to lower demand for jewelry; rising gold prices.


Promoter/FII Holdings
Promoters held 60.54 per cent stake in the company as of 30-Jun-2022, while FIIs owned 2.77 per cent, DIIs 1.96 per cent.

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